Mountains train fares to increase?
There have been some stirrings following the release of the IPART discussion paper for train fares. The recommendation is for the fare structure to be a ‘flag-fall’ charge then a per kilometre fee. Initial media reports suggested this could see Blue Mountains users paying up to 50% higher fares. The paper also calls into question the discounts available for weekly tickets.
In response, the government stressed this was a discussion paper only, but recently reports are appearing that link the IPART fare structure to a revived Tcard electronic ticketing system:
IPART are calling for submissions to ipart@ipart.nsw.gov.au, so if you have a view, it would be a good time to share it.
July 18th, 2008 20:07
My submission is below:
Submission to the IPART Discussion Paper on the Structure and Level of CityRail fares.
18 July 2008
Dear Sir/Madam,
Please find my response to the IPART Discussion Paper on the Structure and Level of CityRail fares.
To understand my position, for issues of bias or agenda, I am a regular CityRail commuter from the Blue Mountains to the Sydney CBD in peak hour. As I travel three times weekly, neither the standard day return fare, or the discounted weekly ticket offer compelling value. My minimum fare charge is realised by purchasing a single ticket to the city, then a weekly on the return journey. As this remains valid for 7 days, I manage seven single journeys for the $60 fare, a slight saving over daily tickets. Of course, as I am occasionally ill and miss some journeys, it probably ends in no distinct benefit over daily tickets.
I recount this information for three reasons, firstly, to demonstrate current ticketing schemes allow little flexibility for regular users apart from daily commuters, secondly, to offer my suggestions to increase value for users in this regard, and thirdly to demonstrate I have little vested interest in suggestions I will make on other areas of the discussion paper.
With regard to my first point, I would like to note the discussion paper takes a general tone that peak hour commuters place a heavy burden on rail infrastructure, and that a pricing regime should reflect this burden.
My own view is that regular peak hour commuters provide a solid support base for the provision of an infrastructure valuable to all members of the community.
Because most peak hour commuters find their travel in-elastic in time and destination, CityRail realises a considerable benefit in being able to plan for a regular and little varying customer base. Should alternative transportation prove more viable, CityRail might find itself needing to plan for wildly varying passenger loads, which would be in nobody’s interest. So let it be noted this comparatively fixed and growing customer base is a valuable asset when planning for future needs.
With this in mind, the weekly discounts, while disproportionate for some users, never the less provide CityRail with accurate forecasting ability, a reason to continue a fare structure that rewards frequent, regular travellers.
In addition, peak hour commuters on CityRail particularly benefit those commuters who drive or use alternative transport such as buses, by reducing the congestion on roads and other transport forms. Again, this community advantage should be remembered when determining the structure of peak hour fares, as a structure that encourages a migration to other transport modes is likely to be counter productive for the community as a whole.
My first suggestion is to recognise frequent, but irregular rail commuters. This could be achieved with a discount ticket product similar to the MetroTen tickets available on Sydney Buses. This would provide economies commensurate with frequency of use to rail travellers who travel frequently, but in a pattern not well served by fixed time period periodical tickets.
My next major area for comment is to do with the elasticity of travel.
The discussion paper correctly identifies that demand for peak hour transport is largely inelastic. That is, few commuters are able to dictate their time of travel. Solutions which focus on increased price signals to decrease peak usage do not alter this non-elasticity, and will be viewed by many commuters as a cynical exercise in revenue growth.
IPART contends that measures outside fare level and structure are out of scope of the current discussion paper, yet it is changes that increase the elasticity of travel scheduling that will have the most direct benefits in reducing peak time patronage.
I suggest that IPART include an adjunct to their recommendation that notes the limited scope of the discussion paper prevents the exploration of measures that may influence travel time and destination elasticity, such as incentives to business to adopt flexible work hours (perhaps by recognising the reduced carbon dioxide emissions of commuters outside the peak times?) or policies of decentralisation.
The most important issue I would seek to raise, is the discontinuity in IPART’s analysis of customers financial and geographical positions. While the paper discusses equity often, it seems to be a discussion of equity of cost per travelled distance, rather than equally valid measures of equity such as cost per trip or travel costs as a percentage of income.
The paper noted mean and median incomes of CityRail commuters as a whole exceed those of the general population, but gives no geographical breakdown of income distribution, despite suggesting fare structure changes that would affect some geographical areas considerably more than others.
While the discussion paper remains silent on the matter, I am prepared to state that commuters in western Sydney and the far northern and southern regions are areas with lower socio-economic means, while those travellers in the inner suburbs enjoy higher incomes. The fare structure in place already charges those travellers from these comparatively impoverished areas a higher absolute charge per trip, and suggestions of distance based fares would increase this disparity.
A traveller from Penrith already pays a penalty for the longer journey in higher fares and longer journey times when compared to a traveller from Bondi Junction, so it would seem a regressive alternative to increase distance based fares.
This argument is reinforced by suggestions future capital spending needs to be accounted for, as inner suburban commuters benefit from existing infrastructure, paid from historic consolidated revenue, which highlights the inequity of asking longer distance travellers to bear a higher proportion of future capital costs.
The discussion paper talks extensively about the value users place on peak hour services, and their willingness or otherwise to pay a higher price for these. Unfortunately, many users of peak services, while valuing the service highly, are unable, rather than unwilling, to afford increased fares. When combined with the inelasticity of peak hour travel, increases in fares could result in increased road congestion and a shift from rail to other modes of public transport – resulting in congestion in those services which may prove more costly to ameliorate, in addition to other externalities such as increased pollution and other inefficiencies.
The discussion paper acknowledges that higher peak fares are unlikely to significantly reduce peak hour patronage, validating the view that demand side instruments such as fare changes will have limited results, and strengthening the case for improved supply side measures.
The discussion paper correctly identifies that the external costs of alternatives to peak hour rail transport are high to the community, but does not quantify these. The failure to estimate these substantial costs undermines any quantitative argument for fare changes.
One other comment I would seek to offer is the analysis presented that off-peak tickets should be compared to periodical tickets. While a proportion of off-peak travel is by regular commuters, many trips are irregular and discretionary. Periodical fares are no alternative for these users. To be consistent, an off-peak periodical ticket could be offered. However, the complexity of such a ticketing option increases rapidly, and is unlikely to offer significant changes in peak patronage.
On review, the discussion paper indicates that considerable time and effort has been spent exploring options, but a limited scope, and faulty assumptions regarding the ‘fairness’ of distance pricing result in recommendations that could cause substantial negative impact on many long distance travellers, while delivering insignificant benefits to capacity planning and inconsequential benefits to inner suburban travellers least in need of them.
I urge IPART to consider CityRail’s system as one providing traveller journeys, rather than passenger kilometres, as only by taking such a bigger picture view can a fair fare structure be developed.